THE JOY LUCK CLUB

This is a brief summary below:

31 ASD members in attendance.

Judge Collyer states in the opening, she's not in the position to make a ruling, but we are here for an emergency motion. (releasing of funds/partial funds) Andy's Attorney Jonathan Goodman

started with a 15 minute summary speech about the civil forfeiture complaint and said to Judge Collyer, "It's not a ponzi, flat out." And I am not standing before you saying give us back 53 million, I'm asking you to give back a modest amount to keep ASD up and running."

First on witness stand: Robert Grayson (ASD member) DAY 1

As soon as Robert took the stand for the defense, William Cowden interjects and said the other two witness in the room would have to leave the courtroom(This is to prevent and safeguard the witnesses testimony) One member was Roger Stewart, and the other Mark Simmons.

There were four witnesses that were asked to be sequestered. It was Mark Simmons, Roger Stewart, our Expert Witness Gerald Nehra, and Thomas Ray

Robert did a fantastic Job on the stand. Everytime the Attorney General grilled Robert with a question trying to trick him, Robert would reply, that's not true and explained. The Attorney General Cowden constantly was on the 125% attack.

Grayson was examined by the Attorney General on his personal and business background experience with online advertising. Before ASD, he was advertising on Yahoo and Google. He was asked if he is advertising now, he said his funds were tied up. They went on to attack how important his traffic was to his site.

The Assistant US Attorney WIlliam Cowden asked him if he did his due diligence with ASD.

Did he start on the free program? he answered yes and went onto explain. They asked him to explain surfing. He was asked what was a rebate and if it was guaranteed. He was asked how often rebates were calculated. He was asked if older members were given privileges over newer members. He was asked if ASD was off-line in the month of July and why? He answered it was part of month due to ASD upgrading with new platforms.

The Assistant US Attorney asked Greyson if customer service was poor during July, and he answered usually he could get through within 1 day.

TheAssistant US Attorney asked him how much he had invested with ASD. He replied, it wasn't an investment. He did say he placed a large amount of funds in.(undisclosed)

TheAssistant US Attorney questioned him on the basic foundation structure of the ASD program.

He was drilled and drilled in about all of the aspects on the ASD program, and William Cowden tried to catch or trap Greyson numerous times, but Greyson would think about the statement for just a second, and reply back to him," That's not true."

Greyson did a wonderful job on the stand

Steve

Next to take the stand was Gerald Nehra

Mr. Nehra is an Attorney in private practice in Muskegon, Michigan. He is one of a very few attorneys nationwide whose practice is devoted exclusively to direct selling and multilevel marketing issues. His 34 years of legal experience includes 9 years at Amway Corporation where he was Director of the Legal Division.

Assistant US Attorney Cowden Rendering below

Larger image Here

After lunch, Assistant US Attorney Cowden asks Gerald, "isn't this the largest retainer ever you received in your entire career so far of the sum of $24,000. Gerald replies yes it's my job. Your title hired with Andy is a Consultant Design Structure Planning Expert? That is correct.

Cowden describes the three ways one can earn money.

1. Advertise

2. referral program

3. Rebate program

Cowden: Rebates are paid at 125%. Is that right?

Nehra: Yes

Cowden: Are the customers also the sellers?

Nehra: No, I have not reviewed the entire website.

Cowden: You saw some concerns with the ASD website?

Nehra: No

Cowden: Did you tell Bill Leaven before meeting with Andy that you were concerned about his website?

Nehra: No

Cowden: Shows letterhead on screen from "Pinnacle"

Goodman: Objection your Honor, I have not seen that letter and would need to review it. 5 minutes pass in silence.It's not from or too Mr. Nehra. It's from Mr. Leaven- to Andy Bowdoin

Judge: It's hearsay, but allows letter to be used to test Nehra recollection.

Nehra: Pinnacle introduced me to Mr. Bowdoin. I do testify that I recognize the letterhead.

Cowden: Prior to going down to ASD and meeting Andy.

Nehra: Yes

Cowden: Did you have a chance to look at the ASD website?

Nehra: Yes

Goodman allows letter to be used

Cowden: Before you went down to Quincy Florida to meet with Andy were you aware of the potential landmines?

Nehra: No

Why did you go down to ASD and get the highest retainage in your life?

Nehra: It's my job.

Cowden: You got $24,000 in retainage?

Nehra: Yes

Cowden: You spoke with Andy for 6 hours?

Nehra: Yes

Cowden: You determined ASD had no legal issues?

Nehra: I looked at the terms and service, the ASD video from Mr. Garner, and the legality statement.

Cowden shows up on the screen for the entire courtroom The ASD legality statement on the ASD website. Declaration is given to the government defense and the Judge.

• Exhibit a. Legality Statement Its in the PDF Court Doc page98 of 101
• exhibit 3 Terms of service Click here ....PDF Court Doc pages 68-78

William Cowden the Attorney General cross examines Nehra:

On the first page of the company's website you can earn 25% of your purchase. Advertising becomes free with rebates. Cowden says, When you sell advertisement that becomes "FREE". Are you really selling advertisements? Did you review Mr. Garner's legality statement?

Nehra: I reviewed it yes.

Cowden goes back to the emails sent in

Cowden: shows an ASD members Testimonials sent in ExhibitD page 28 Signed by Robert Greyson. Top of the letter, 1st paragraph.

Cowden: Do products have an intrinsic value?

Judge: gets on the Attorney General and states, even I can answer that.

Cowden: Does advertising become free with rebates?

Nehra: Not answering directly

Judge: Answer yes or no

Nehra: Yes

Cowden: Page 34, paragraph 4, last sentence (Ad for Macy's highlighted)

Cowden: If the company has no customers or they selling a product?

Nehra: Of course they has products, the members..(Meaning ASD members have products to sell)

Cowden shows another ASD member's letter on the slide. DOC 7-6 emails page 5 of 57

Home showroom

Cowden: Tells the court that this type of business is localized and have no validity around the country.

Nehra: mentions Branding of a websites logo and name is of high value.

Cowden shows another ASD member's letter on the slide.

Cowden used this letter above as a reference to unwarranted sites in the rotator

Cowden: Brings up ASD site, "la fuented" ASD's Spanish version site. Have you been to the site?

Nehra: I have heard of it, but have never went there because I can't read Spanish.

Cowden: Page 49 of emails

Why I use Ad Surf Daily (click to see image of letter)

Paragraph 3 highlighted

Cowden: The rebate program is illrelevant to whether they are selling advertisement

Nehra: It's not illrelevant

Cowden: Bill Leaven and his son Aaron was at the meeting with Andy Bowdoin.

Nehra: Yes

Cowden: In your opinion, the ASD program is "legal"

Nehra: Yes

Cowden: If you were to learn that ASD was compensating the employees with ad packages, would that change your opinion that's it a legal business?

Nehra: No

Cowden: Did you ask Andy what advertisers he had?

Nehra: No

Cowden: Would you be disappointed to learn that ASD members had defunct websites? Or no websites at all?

Nehra: Yes I would be disappointed.

Cowden: Why would someone else advertise with someone elses website?

Nehra: For people without a website.

Cowdin: When you got the members emails (referring to what Andy had sent Nehra to look over.. 1023 emails) did you ask Andy how they got the emails?

Nehra: They sent communication out to the members for support.

Cowden: ASD has around 100,000 members correct?

Nehra: That seems to be correct

Cowden: Do you believe you can look at 1% of the customers and tell if they are selling a legitiment product?

Nehra: Yes

Cowden: Before you went down to see Andy were you concerned about the ASD model?

Nehra: No

Cowden: You agreed to $24,000?

Nehra: Yes

Cowden: After spending time with Andy, were you concerned about the model?

Nehra: Yes, we where starting to separate terms of agreement for members and advertisements

Cowden: What concerns you the most:

Nehra: I thought I just answered that.

Cowden: Let me give you an example, If my company says give me a $1.00 and I will give you $1.25. You don't believe they can do that do you?

Nehra: That's true, but....... (Collyer interrupt)

Judge: ..........It's not a Ponzi because they put back 5% back into the program (correcting phrase)

Cowden: Where's the money coming from?

Nehra: From tomorrow revenues, and customers purchasing Internet advertising.

July 30th 6 hour conversation with Andy Bowdoin

Cowden: Did he tell you how he started the company?

Nehra: I do not recall specifically everything Andy Bowdoin told me. He was asking me more questions. He told me about his relationship with Robert Garner adding him to his team.

Cowden: What did he say about the SEC complaint rules?

Nehra: He said he had an opinion from the Miami Firm.

Cowden: Why did he ask you to look at the opinions?

Nehra: He didn't ask me to look at it.

Cowden: Did he tell you about the relationship with Robert Garner?

Nehra: He showed me the video, and allowed me to work with Mr. Garner, call him, email him, etc.

Cowden: Did you ask Andy how long he had the business?

Nehra: About a year and a half

Cowden: Did Mr. Bowdoin show you the legal opinion from the Miami firm?

Nehra: I did not conclude if it was written or oral and no opinion was shown to me.

Cowden: Did you watch the video?

Nehra: Yes, I watched it in his office on a large screen.

Cowden: After you saw the video, did you have concerns?

Nehra: I would have adjusted a word or two.

Cowden: What would you have changed?

Nehra: I don't recall exactly, but would have more separation with members and advertisers legality statements.

Judge: Parties will concur after break to see if we can conclude this today.

Goodman (ASD attorney) We will do our very best to finish today. I'm trimming my witness list. We will get it done today.

Cowden: Your opinion that ASD is a legit MLM?

Nehra: Yes

Going to show you the very front part of the video, New members success video. (The video with Robert Garner in Andy's office) Cowden shows the first 4 minutes of the video and stops it.

Cowden: You see the Video?

Nehra: Yes

Cowden: Did he mention advertising?

Nehra: I'm not sure

Cowden: You saw the statement in the video, "Get started earning money." ?

Nehra: Yes

Cowden: and the statement, "Financial Freedom."?

Nehra: Yes

Cowden: The fact that he doesn't mention advertising.... ( The Judge steps in)

Judge: I'm going to watch the entire video. Don't worry.

Cowden: Did you have some concerns about the video?

Nehra: Yes I did

Cowden: Did you ask Andy if there was a limit to purchasing of Ad packages?

Nehra: I don't believe I did. Yes there is a limit. I did see that.

Cowden: Did you explore why they put a limit on Ads?

Nehra: I don't believe I asked him, no. Under the Patriot Act it causes alarms with people like you. The explosive growth seemed to alarm you and others. Explosional growth is why we are here today.

Judge: Are we going to introduce the video into evidence? No objection your honor.

Cowden: Shows 5 page document to be entered into evidence. Goodman looks at them. We don't object to this particular evidence. Only problem I see, Cowden doesn't have the "join for free page" (Cowden lacking all the pages on the site)

Cowden seats down

Goodman's Attorney Michael Fayad asks Nehra questions now.

Michael Fayad: Tell us the length of time spent on ASD

Nehra: In addition to the 6 hours, I read materials. I worked the next day with Mr. Garner. Probably on Thursday another 4 hours.

Michael Fayad: 2 days? 3 days?

Nehra: Minimum 2 days, most 3 days

Michael Fayad:$2,000 a month for 12 months for services for the $24,000. Would you have done a greater review if the funds weren't seized?

Nehra: Yes

Michael Fayad: You reviewed the Terms of Service, Legality Statements, Video, and people?

Nehra: Yes, Terms of service was paramount to me.The virgin of the language is one of the minor flaws I'd fix.

Michael Fayad:Is there a period of time for rebates to acquire?

Nehra: On a daily basis. Monday's sales would be Tuesday's rebates

Michael Fayad: Are you comfortable with the 1,027 sample testimonials?

Nehra: Yes Im comfortable with that. I believe I was to use the emails as a base

Michael Fayad: Was it your job to address any misunderstandings in the emails?

Nehra: No, I wasn't asked to do that.

Michael Fayad: That's all. Nehra steps down. Time is 12:15

Goodman offering testimonials as an exhibit into evidence.

No Objection

#1 Grayson

Chuck Osmin takes the stand of Quincy Florida

I have been clowning for about 14 years now, in and around the Tallahassee, Florida area. I started with a church bus route and branched off into doing birthday parties, gospel clowning, and community service clowning.

Goodman: Starts asking him about his family members.

Judge: I don't need to know about his family. Please lets get on with this.

Chuck: briefly tells the court his prior work in the Post Office, and Military background.

Goodman:When did you first start working with ASD

Chuck: In April 21st of 2008

Goodman: Did you become involved with a special group?

Chuck: Yes, accounting and customer service supervisor

Goodman: How many employees would you say?

Chuck: upwards of 30 in customer service

Goodman: Sense the time of the seizure has you continued to work with ASD?

Chuck: Yes

Goodman:Why have you continued working for ASD without a salary?

Chuck: I believe in the company and will work in any capacity they need me.

Goodman: What type of problems did you see with ASD with the phenomenal growth?

Chuck: When I started in April we had 8 people and 20,000 members within 90 days we had 100,000. We couldn't hire people fast enough. We started having issues of lack of space, offices, and computers. They expanded the phone lines 3 times in my time.

Goodman: How many hours did you work per week?

Chuck: 60 to 70 hours per week.

Goodman: Were you in the program also?

Chuck: yes I had 3 websites in the rotator.

1. A whole foods pharmacy

2.a water treatment company (Zuma)

3. a part-time clowning business see here

Chuck goes on to mention that there was link on the ASD breaking news website where members could find an affiliate program for people that didn't have a website. Chuck stated, "Pay.com was one, the other one I can't remember." So there was actual products for members.

*****************LUNCH ****************************

Vasa B. Muthyala, Cowden's assistant Attorney questions Chuck Osmin.

Vasa: How much have you earned from Zuma?

Chuck Osmin: I have developed 3 customers

Vasa: Did you purchse Ad packages?

Chuck Osmin: Yes

Vasa: How many?

Chuck Osmin: 50

Vasa: Where you given Ad pacakges?

Chuck Osmin: Yes

Vasa: How many?

Chuck Osmin: I was given 600 Ad Packages for the Tampa convention, and 1,000 ad packages for the Miami Rally

Vasa: How many ad packages do you have?

Chuck Osmin: 3,650

Vasa goes on to talk about myspace pages are not valid webpages for advertsing. (Chuck has his clown page listed there... If someone can find me the link I will post it)

Vasa goes onto to say, to Chuck about people without valid webpages, and if there was company enforcement on this.

Vasa: How did you learn about some of the members webpages were not valid in the rotator?

Chuck Osmin: In the meetings

Vasa: What type of meetings?

Chuck Osmin: Customer service meetings, and at our level we had no enforcement of invalid webpages

Vasa: What happened when members with invalid pages in the rotator didnt follow the rules?

Chuck Osmin: They would get a warning

Vasa: WHat would happen if they broke it again?

Chuck Osmin: I don't know, I wasnt in that department.

Judge: What was your title?

Chuck Osmin: I was a team leader in the customer/accounting department

Vasa: Ever heard of a board meeting at ASD?

Chuck Osmin: No

Vasa: When did ASD start the bnsiness?

Chuck Osmin: Oct, 2006

Vasa: Who was the President?

Chuck Osmin: Andy Bowdoin

Judge: Lets say I put in 100 dollars, that gives me 100 ad packages, and my site is seen 100 times.100 dollars, 100 ad packages. I really get 100 credits.

Chuck Osmin: Correct

Judge: If i didnt do any viewing (clicking of other people's websites) my views to my page would run out in 4 days.

She asks everyone in the court if she undertsnads it correctly, most everyone agrees.

Chuck talks about the back office and how it works.

Vasa: Was ASD sending out checks every single day?

Chuck Osmin: Yes, that's what intially caused the slow down. The tremendous growth.

Vasa: Did ASD has other sources of income streams?

Chuck Osmin: Not sure specifically , but Nate Boyd an ex complaince officier I had ask him about that. He said that there was other income streams but didnt want that disclosed to the public. I trusted him, and never asked him again.

Vasa: Did you talk with Andy Bowdoin at your job?

Chuck Osmin: Yes

Vasa: Ever attend any Rallies?

Chuck Osmin: Yes, the Tampa and the Maimi Rallies

Vasa: How much revenues did the greenback street bring in?

Chuck Osmin: I don't now

Vasa: What type of questions did most people call you about?

Chuck Osmin: Why their Ad packages hadn't posted yet.

Vasa: according to ASD, when there's no revenues, members get no rebates.

Chuck Osmin: Correct

Vasa talks about credit given to people when the site was down..

Judge: Where did this money come from?

Chuck Osmin: There is a 5% fund set up for this.

Judge: Unindentified

Check Osmin: Correct

Vasa places this into government exhibit #2

Vasa: The reserve account was credited when revenue was low?

Chuck Osmin: Correct

Vasa: how many people are in the ASD only for the advertising?

Chuck Osmin: I don't know, my concern is customer service was to deal with issues relating to their account. Tom Ray is another member that just joined ASD for the advertising.

Goodman: Objection, leading question with statement,

Judge: How many free advertisers are there?

Chuck Osmin: I don't know, but there is quite a few. My clowning website was up and I was doing that for free.

Vasa: Ever hear of Andy Bowdoin talk about investing funds into the call center?

Chuck Osmin: No

Vasa: Ever hear Andy Bowdoin investing funds into another international bank?

Chuck Osmin: Yes, in Antigua to except a Visa card. I'm not sure what it's called. (merchant account)

Vasa: ever hear of Andy Bowdoin to invest in real estate?

Chuck Osmin: Yes

Vasa: Was he going to use member's money for that?

Chuck Osmin: I don't know

Vasa: You treat the ad packages as cash?

Chuck Osmin: No, I treat my checks sent to me that i deposit into my bank account as cash.

(crowd laughs in courtroom)

Vasa: Who's Tiffany Osmin

Chuck Osmin:My neice

Vasa:Why did you gave her ad packages?

Chuck Osmin: I wanted to.

Vasa: Who's John Osmin?

Chuck Osmin: He's my son

Vasa: You gave him ad packages?

Chuck Osmin: Yes

Vasa: What for?

Chuck Osmin: I wanted to. I gave him 50 ad packages for his Birthday.

Vasa: When was the first time you looked at this page? (showing ASD join page)

Chuck Osmin: Not sinse I joined in April i guess.

Attorney submits into evidence

Exhibit #4 Opportunity Tab page on ASD member page

Exhibit #5 Frequently asked questions page

Judge: Do you agree with this? ( looking over to ASD legal counsil)

Attorney Michael Fayad: Objection, I wasn't able to read the page yet. I wasn't listening.

Judge: Why don't you listen now Mr. Fayad

Exhibit #6 my notes are not clear on this Tab page

Exhibit #7 Join free Tab

No Objections

No further questions

Judge: I pay 100 dollars, I get 100 views. WHat's the benefit to being a paying member rather than a free member?

Chuck Osmin:

The first level is free. no monthly fee's. View 24 sites/day

2nd level is the excutive level. 4 10.00/month you need to surf 24 sites a day to qualify for rebates

5% first level, 3% on the second level and a 2% processing fee for cash outs on Monday only.

3rd level is the VIP level. cost is $25.00/month

7% Ist level, 4% 2nd level cash outs monday, Wednesday and Fridays. Only have to surf 18 sites per day.

4th Level executive VIP. 10% Ist level, 5% second, no cash out fee's, and 5 sites in the rotator. Most view 12 sites/day. Cash outs: Any day without fee's.

Judge: Not sure if we will have enought time to finish today. My soonest opening is Monday.

Judge: Thank You, lets take short recess......

The last to take the stand is Phillip Schwartz

Industry Experience Banking and Financial Institutions Recognition AV rated by Martindale-Hubbell Listed in Florida Trend's Legal Elite, 2006 Listed in The Best Lawyers in America 2008 for Corporate Law Bar Admissions 1979, Florida Professional Memberships and Activities The Florida Bar (Chair, Business Law Section, 1996-1997) Education 1979: LL.M., New York University School of Law, Major(s): Taxation 1978: J.D., University of Miami School of Law 1975: B.A., State University of New York at Stony Brook

Attorney Goodman intorduces Philipp as a partner of his. Listing his credentials giving seminars on various companies dealing with complaince and regulatory issues including alledged ponzi schemes.'

Goodman advices Schwartz: I don;t want to you to read what's in the compliance plan because the Judge can do that. ( this is to save time)

Phillip Schwartz: The primary purpose of the plan is to protect the interest of the members. Secondly, there needs to be a road map on how this business can be re evaluated with oversight and court approval.

We picked a small amount of 2 million dollars so we can find out who is owed what.It's not a substantial number.Future plans for the company will be developed

Phillip Schwartz: Talks about myspace and facebook, and goes onto to say that ASD is at the door to these companies (comparing ASD to them) This is the new era of interent advertising business today.

He talks about "beefing up" the complaince plan for ASD, and the terms and service. The companies infrasture needs to be fixed due to the growth.

Develop a cash out plan, making accounting embedded (where one can withdraw funds on the webpage), and lastly a strong management needed

With a new policy in place, members would have to agree.

Strong management needed for oversight to board of members.

It is clear the mr. Bowdoin is under a cloud and will not be in charge, but have a court opointed monitor.A memebers steering committee put into place. Needs to be robust having actice input. Should have it's own counsil. And this would be brought to the Court for final approval to allow this business to move forward.

Phillip Schwartz thanks the Judge

Cowden starts asking Schwartz questions

Cowden: ASD was committing wire fraud

Phillip Schwartz: In a civil case, that's "Alleged." That's what the compliance plan is being proposed.

Cowden: This is a MLM business opportunity, with 5% levels. and 10% levels. Put in a dollar and take out $1.25

Cowdin: Do we give this money back to Andy to start a legitiment business?

Last 10 minutes of court

Assistant US Attorney Cowden : So your asking the court to release funds to develop a compliance plan?

Phil schwartz (Attorney Testifying on stand for ASD)

"It's a Hooray victory for the Court if they don't do this."

The above line implies the court will win if they don't release any funds.

Judge Collyer:

"Let's assume it's wire fraud, that they are right. But if it is wire fraud or a ponzi, you are asking for 2 or 3 million dollars? I'll take it as indeterminable fact then. If that's so, why isn't it possible to negotiate. But why isnt there a settlement discussion rather than a compliance plan. The Judge also said, I've not made decision yet."

Extended time for emergency motion is 2 to 3 weeks.

(my thoughts) In regards to the Judge stating the above, I think she meant why was so much time spent on alleged ponzi accusations and wire fraud and not allotted more to the release of the 2 million dollars